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Compliance for academies

In the second of a series of features, Buzzacott looks at compliance and what it means for the academies

Posted by Lucinda Reid | November 29, 2016 | People, policy, politics

The Government launched its White Paper in March 2016, which has been the subject of much interest in its aim to drive every school to be an academy. How far that particular aim is driven remains to be seen but the White Paper does continue along a path of radical change that all schools, currently within or outside the academy movement should take heed of. More than half of academies are already part of a multi-academy trust (MAT) with many more set to form or join MATs. The new language is ‘supported autonomy, alignment of funding, control, responsibility and accountability in one place, and institutional collaboration’. The White Paper signals a ‘school-led’ system where improvement is delivered by effective education leaders and every school is an academy.

Senior management and trustees should be familiar with the White Paper’s contents, which should form the backdrop to academies strategic planning.

Whether you are in a single academy trust (SAT) or a MAT, you work in a complex statutory framework. This update covers some of the latest news on what is happening in the sector, including updates on key financial, compliance and assurance issues and helps signpost you to information relevant to your areas of accountability.

Buzzacott accountants have produced a series of short articles proving an overview of the academy sector. Read on for the second article in the series which is based on compliance:


Academies Financial Handbook 2016

The Academies Financial Handbook has been published and takes effect from 1 September 2016. A full copy of the handbook is available to download here but we summarise the main changes for you below:

• Senior executive leader – all trusts must have a senior executive leader who should also be appointed as accounting officer; these roles must not rotate.

• Register of interests – a trust must publish the relevant business and pecuniary interests of their accounting officer regardless of whether or not they are a trustee.

• Notifications to DfE - trusts must use Edubase to notify the DfE of the appointment and vacating of the positions of member, trustee, local governor in a multi-academy trust, chair of trustees, chairs of local governing bodies, accounting officer and chief financial officer.

• Members - academy trusts should be established with at least three members, although the DfE encourages trusts to have at least five members in total, as this ensures enough members can take decisions via special resolution and facilitates majority decisions being taken by ordinary resolution. Governance structures in which members are also employees are not considered by DfE to be best practice and the latest model articles do not allow members to be employees.

• Financial control - variances between budget and actual income and expenditure must be understood by trustees and addressed. Exposure to investment products must be tightly controlled so that security of funds takes precedence over revenue maximisation.

• Whistleblowing – it is now a requirement rather than a recommendation for trusts to have a whistleblowing policy.

• Risk management - trusts must implement reasonable risk management audit recommendations that are made to them by risk auditors. The audit committee’s oversight of its trust must extend to the controls and risks at its constituent academies, where the trust has them. Oversight must also ensure that information submitted to DfE and Education Funding Agency (EFA) that affects funding is accurate and compliant.

Academies severance payments

The EFA has updated its guidance to academies considering making special severance payments. These payments are paid to employees, contractors and others outside of normal statutory or contractual requirements when leaving employment in public service whether they resign, are dismissed or reach an agreed termination of contract.

The guidance, which explains what should be considered before making any such payments, and how to seek approval from the EFA for payments of £50,000 or over, has been updated to require academies to provide a financial assessment and to demonstrate that all alternative options have been explored before deciding to make a non- contractual severance payment. Sub-contracting controls guidance for 2016-17

The EFA published in July 2016 sub- contracting controls regulations that apply from 1 August 2016. In addition to providing guidance on how sub- contracting arrangements in general should be set up, controlled and managed, a new restriction applies to maintained schools and academies that operate sub-contracting arrangements whereby the whole programme of a student’s education is delivered by a third party, either locally or at a distance. Under the regulations all such arrangements must cease by the end of the 2017/18 academic year, thereby ensuring that an academy’s roll only includes those pupils educated at the academy.

An academy with whole programme sub-contracting arrangements for 2016 to 2017 should have informed the EFA of those arrangements by the end of September 2016. In addition, schools or academies wishing to continue those arrangements for 2017 to 2018 (only) should set out their case to the EFA.

There is no proposal to prohibit collaboration with local partner schools, or sub-contracting with other local partners for some elements of a student’s programme, where this is serving their educational needs and is managed and monitored in line with this guidance. The key point is that pupils on the academy’s roll must attend the academy itself for part of their education.

To find out more about Buzzacott, visit their website or email them at

The first feature in the series was on The Funding Landscape.  

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